I’m traveling again so apologies for the delaying in issuing.
This has been a nose bleeding retrace for dm equity markets. S&P close to making her prior highs. Nas100 new highs. From an allocation perspective, whatever the allocation be whether currencies, pms, bonds or commodities confusion reigns here. Usually confusion preempts a trend change, in my experience.
Here the Swiss team:
And here GS
And here Yardeni and Factset. Earnings are back to their 2013 levels. The great promise of investment and earnings growth is not coming. Perpetually, as per the Factset report, earnings consistently year after year disappoint and are revised downward as the year progresses. Speculators are perpetually forced to buy future improvements that never seem to emerge. With central banks preventing any downward price action on indexes for long and negative interest rates on many cash currency accounts now there is this squeeze higher for nominal prices even as earnings and growth disappoint. The gap between economic and earnings reality and central bank monetary action gaps ever greater making for an uncomfortable ride for those both long and short.
Across most of the DM world even as a macro comment although gdp growth is considerably higher than the 2008 bust year and employment has moved back to record levels tax receipts are still below their 2008 levels. This speaks volumes. In spite of all of this liquidity pumped (and continuing to be pumped) into the system and negative interest rates on savings accounts we are still struggling to reflate here. The ECB looking to expand her monetary madness this December. The German High Courts appear to have fallen silent on the issue, for now.
Yardeni and Factset: